AG reveals dire financial state of Mangaung and Masilonyana municipalities

The Office of Auditor-General on Tuesday painted a bleak picture of the state of affairs of the finances of Mangaung metro municipality in Bloemfontein and Masilonyana local municipality in the Free State.

This dismal overview was unveiled during a briefing to the Standing Committee on Public Accounts as officials highlighted the alarming audit outcomes for the 2023-24 financial year.

Both councils are currently under intervention by the national government after failed interventions by the Free State government.

The A-G’s business unit leader for Free State, Odwa Duda said the 2023-24 audit outcomes made similar observations to those of the previous year.

Duda said they observed a lot of misalignment in Mangaung Metro.

“They would budget and plan to do things, do public participation, but when you look at the performance there is total misalignment,” he said.

Duda said the metro was characterised with a lot of service delivery challenges in so far as the status of roads, waste water works and landfill sites were concerned.

“We found there is lot of challenge and we realised it is because of planning, lack of maintenance and repairs. There are huge delays to complete the projects. They have not addressed those matters.”

He also said despite the provincial and national governments providing support to improve planning processes, there was no impact.

Duda told the MPs that the Masilonyana local municipality had received a disclaimer audit opinion for a number of years.

“The challenge of repeat disclaimers is because there are no plans to address poor record keeping. What was even concerning compared to 2022-23, their situation is getting worse. There is no improvement.”

Duda said the council has for two years not submitted financial statements for auditing purposes, prompting the A-G to use extended powers to force them to submit.

Deputy business unit leader Sue-Ellen Steenbok confirmed that they have not seen improvement in Mangaung.

Steenbok painted a picture of Mangaung metro that has been struggling with non-compliance as well as reporting performance information.

“For the past five years we have been having findings with non-compliance and performance information. There are a lot of material findings,” she said.

Steenbok said the municipality’s qualification remained expenditure management on overtime, revenue collection and revenue billing not complete, among others.

The metro uses consultants to prepare financial statements.

“We have not seen much improvement even though they have consultants.”

Steenbok added that the metro achieved 45% on its service delivery targets and recorded 111% of budget expenditure.

The metro recorded R277m in irregular expenditure due to failure to comply with supply chain processes while fruitless and wasteful expenditure stood at R123m.

The council has a R6 billion budget, but its capital expenditure budget was only R792m.

“Capital expenditure is below the norm. Spending on repairs and maintenance is only 2% when the National Treasury indicated that they should spend 8%,” she added.

Manager for audit at Masilonyana municipality Gregory Coetzee said the council has obtained a disclaimer nine times over a 10-year period.

Coetzee said the local municipality was placed under administration by the provincial government in 2022 and has had acting persons in senior management positions over the years.

Coetzee told the MPs that the audit found incorrect reporting in the financial statements and supporting information not provided to auditors.

“Most of the things not disclosed in financial statements are serious matters,” he said.

Scopa chairperson Songezo Zibi said it was clear that things have broken down in the councils in light of the history of non-compliance.

Zibi said the committee would pay a visit to the councils.

“It is a question of when we will go there so that we can get the accountability South Africans deserve. I can only imagine what the impact on the people’s lives is,” he said.

mayibongwe.maqhina@inl.co.za